REUTERS: Three individuals familiar with the situation told Reuters that China’s antitrust regulator is expected to formally ban Tencent Holdings Ltd’s attempt to unite the country’s top two videogame streaming sites, Huya and DouYu. According to two of the sources, Tencent has not come up with enough remedies to satisfy the State Administration of Market Regulation’s (SAMR) standards for relinquishing exclusive rights.
According to one of them and a separate source, the internet giant recently withdrew the merger application for antitrust review and re-filed it after SAMR informed the firm that it would not be able to finish the review of the merger within 180 days of its first submission.
The individuals did not want to be identified because the material is confidential.
Tencent, Huya, DouYu, and the SAMR did not immediately respond to Reuters requests for comment. Tencent is China’s largest videogame and social media business.
Separately, SAMR is expected to approve Tencent’s acquisition of private search engine Sogou this month, according to one of the sources. According to Reuters, the agency was ready to approve the scheme in April.
Last year, Tencent revealed plans to merge Huya and DouYu in a deal aimed at streamlining its shares in the companies, which were estimated by analytics firm MobTech to have an 80% share of a market worth more than $3 billion and rising fast.
Huya and DouYu, China’s most popular video game streaming sites, are ranked No. 1 and No. 2, respectively, with fans flocking to watch e-sports competitions and follow professional gamers.
Tencent controls 36.9% of Huya and nearly a third of DouYu, both of which are publicly traded in the United States and have a combined market capitalization of US$6 billion.
Tencent was forced to make concessions in a plan to merge Huya and DouYu in order to overcome antitrust concerns, according to Reuters in March, citing people familiar with the situation.
(Pei Li and Yingzhi Yang contributed reporting; Sumeet Chatterjee and Emelia Sithole-Matarise edited the piece.)/n
